Market Overview: Both gold and silver are under some moderate selling pressure in early trade today as the dollar surges higher. The gold market has been moving higher since bottoming out last month, and some short-term traders may simply be taking some profits today, as well. Some investors may also be squaring positions ahead of Trump’s first major press conference scheduled for later this morning.
Key Data Points: The latest data on MBA Mortgage Applications this morning showed purchase applications for home mortgages rising a seasonally adjusted 6 percent last week while refinancing applications rose 4 percent. The purchase index is down 18 percent on a year-over-year basis.
The data highlight of the day will be Donald Trump’s press conference. There are a few major areas of focus that investors will likely be looking for more details on including tax reforms, trade and infrastructure spending.
Markets have risen sharply on the notion of lower taxes and increased spending, but have yet to get a lot of details about the new administration’s economic plans.
The subject of Russia will almost certainly come up today as well, as ongoing concerns over Trump’s potential ties with Russia have been exacerbated again with a new, unsubstantiated report that Russia has damaging information concerning the President-elect that could potentially be used for blackmail.
Outside Markets: Stocks are moving modestly higher today ahead of the press conference. Interest rates are quiet so far this morning while the dollar index is surging higher. Stocks and the dollar remain not far from recent highs. Rates have been declining again in recent action, and could potentially be seeing a minor pullback before resuming an uptrend.
The Big Picture: Silver prices have been trending higher in recent action yet have thus far not been able to get back above $17 per ounce. A stronger dollar and robust appetite for risk have likely played a role in keeping silver subdued, and could potentially continue to do so if stocks and the dollar continue to rise.
Of course, a lot will depend on exactly what economic policies are implemented by the new administration. Silver has the potential to rise from both an increase in investment demand as well as an increase in industrial demand. Silver, like other markets, may remain somewhat subdued until more clarity is provided about economic policies going forward. The white metal is off to a good start, however, and could potentially see a large increase in investor interest if stocks begin to falter.
This market update is provided weekly with analysis. You can always check the gold and silver prices by watching our on-site charts.